Insurance adjusters use a variety of methods to determine the initial settlement offer, or “bid,” for a claim. The specific approach will depend on the nature of the claim and the policy terms, but some common factors that adjusters may consider include:
- The extent of the damage: The adjuster will assess the extent of the damage caused by the event or incident that led to the claim. This may involve examining the damaged property, reviewing repair estimates, and considering any additional costs that may be incurred as a result of the damage.
- The policy terms: The adjuster will review the terms of the policy to determine what is covered and what is not. The policy limits and exclusions will also be taken into account when determining the initial settlement offer.
- The applicable laws and regulations: The adjuster will consider any laws or regulations that may affect the claim, including state insurance laws and any relevant industry standards.
- The claimant’s documentation: The adjuster will review any documentation provided by the claimant, such as bills, receipts, and repair estimates, to determine the validity of the claim and the appropriate settlement amount.
- Comparable settlements: The adjuster may also consider any comparable settlements that have been made in similar cases in order to determine a fair initial settlement offer.
Overall, the goal of the adjuster is to determine an initial settlement offer that is fair and reasonable for both the insurer and the claimant, based on the circumstances of the claim and the terms of the policy. The initial settlement offer is typically lower than the final settlement amount, as it is intended to serve as a starting point for negotiations.